ZIMSEC O Level Geography Notes: Trade:Trade between developing and developed nations
- Developing countries export mostly raw materials to developed countries and the volume of trade among developing countries is generally low.
- Developing countries have the highest proportion of the world’ population and their economies are based on export of raw materials which are needed in developed countries.
- Due to this imbalance, developing countries have a trade dependency on developed countries.
- This has a disadvantage because any changes in economic policies and conditions has a severe impact on the developing countries.
- An example is the shift towards new raw materials such as replacing copper ire with optical fibre in telecommunications has greatly reduced the demand for copper on the world market.
- This has a negative effect on Zambian economy which is heavily dependent on export of copper.
- Similarly, technological developments which involve recycling and use of synthetic materials in manufacturing has reduced the demand for primary raw materials drastically.
- Exports earnings by developing countries are also eroded by tendency amongst these countries to oversupply the market and this lower commodity prices.
- In developing countries exports are dominated by one or two primary products mainly minerals or crops, whereas in developed countries there is a wide variety of manufactured goods.
|Developing countries||Development countries|
|Exports dominated by one or two primary products e.g minerals, crops||Mainly a wide variety of manufactured goods|
|Prices and demand for primary products fluctuate at a low level and the rate of commodity price increase is generally low.||Demand for manufacture goods is steady at a high level and the price have risen|
|The total trade for these countries is small and most countries have a trade deficit||Volume of total trade is large and countries have a trade surplus|
|Trade is dominated by a few large TNC which export profits to their parent companies which re in developed countries.||All profits are retained by the exporting companies.|
|A poorly developed transport infrastructure, hampers trade.||Trade is facilitaed by well developed transport networks|
|Trade links are strongest with developed countries than with other developing countries.||Countries have many trade partners but the greatest volume of trade is with other developed countries.|
|Trade is affected severely when there is a world economic recession.||Trade is badly affected when there is a world economic recession.|
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